Small Business and the 2016 Election and CFPB

  • Small Business and the 2016 Election
  • CFPB Comes to the Bay Area
  • The Goodies – This week’s highlight is Small Business California’s 12th annual survey of small businesses around the state that takes the pulse of small business in California. Please forward to your clients.

Small Business and the 2016 Election

We’ve heard a lot about walls and children, but what does the microbusiness sector want to hear during the election season? To answer that question, AEO has developed Closing the Gap: AEO’s 2016 Policy Platform to educate the candidates on the issues most important to our sector. Here’s a list of AEO’s to-dos for policymakers:

  • support efforts that yield pathways to alternative capital;
  • create pools of funds within the CDFI Fund dedicated to underserved entrepreneurs;
  • make available aggregate lending data with respect to minorities and women to identify gaps in lending;
  • work with industry to ensure transparency is a cornerstone of lending products and services;
  • encourage lenders to adopt [credit assessment] models that take a holistic view of the borrower;
  • re-authorize the Women’s Business Center Program;
  • ensure that self-employment is recognized as job creation and adopted by workforce programs;
  • consider legislative proposals that bring both federal programs into the 21st century; and
  • continue to invest in proven lending and counseling programs that support the needs across the continuum of entrepreneurs.

You can download Closing the Gap: AEO’s 2016 Policy Platform

CFPB Comes to the Bay Area

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray (see photo) and Assistant Director of Small Business Grady Hedgespeth (formerly of the SBA) were in town last week to listen to what consumers and small businesses had to say. On Wednesday, Claudia hosted a small group to meet with them about requiring small business lenders to collect and report demographic data about where and to whom they lend, which will help identify gaps in access to credit including for minority owned businesses. On Thursday, CRC members (and CAMEO members!) – MEDA, Opportunity Fund, and Renaissance Entrepreneurship Center – organized a small business tour to share insights about working with small business owners through lending and technical assistance. One issue that kept arising was that when local small businesses have capital access problems, the community suffers. Businesses close, employees lose their jobs and their homes, and local customers lose services. Then on Friday, I gave public comments at a town hall in Oakland.

One of our main concerns is the growth of unregulated online lending. While some lenders are responsible and transparent, others are not. This segment dwarfs SBA lending by a factor of six, and banks have been slow to re-enter this market. Easy online lending sites have become de facto banks of small business lending. The bad ‘lenders’ in this space are not transparent, have confusing terms with high interest rates, don’t consider a borrower’s ability to payback, and can lead to debt traps. Many times these financial products don’t pencil out for a businesses’ bottom line.

We applaud [the CFPB] for your efforts to collect complaints on small business lending products and urge you to take leadership on embracing responsible lending practices and ensure the financial institutions follow best practices.

Thanks to the CFPB for listening to our issues and taking steps to solve them. CAMEO and our colleagues will continue to work with the CFPB on these important issues to our sector.

The Goodies

New opportunities for training, conference information, funding, scholarships, and other information that have crossed our desks since the last Must Know. I have posted a running tab of current Industry Goodies on the CAMEO website that lists items that were in past emails. Check it out to make sure you’re not missing anything, like grants whose deadlines are still alive!

CAMEO Member Kudos: Boku Kodama, Renaissance Entrepreneurship Center and CAMEO Board Member, is working with Laney College in Oakland on a one-stop shop for entrepreneurship training and business startups. It’s a great project that if successful, Boku says will “revolutionize a process that will serve students and clients with sustainable results.”

For Your Clients: Our friends at Small Business California are conducting their 12th annual survey of small businesses around the state. Please forward to your clients and friends in the small business community. This is an important annual effort that takes the pulse of small business in California.

For Your Clients: Small Business Majority is hosting Access to Capital 101: Funding Options to Start and Grow Your Business every Wednesday, the next one is August 3. They present an overview of alternative lending options including community development financial institutions, SBA’s loan guarantee program and reputable online options, key questions to consider when seeking funding, the Small Business Borrowers’ Bill of Rights and helpful tools and resources.

Free Webinar: Join CFED’s Assets & Opportunity Network and Racial Wealth Divide Initiative for a webinar — “Programs, Policies, Partnerships: Coming Together to Heal the Racial Wealth Divide” on Wednesday, August 3 from 12-1:30 pm PDT.

Grant Opportunity: AARP Foundation is launching Work for Yourself@50+, a new initiative designed to educate low-income adults age 50+ about self-employment, including the factors that one needs to consider and first steps that one should take when deciding to work for themselves. This initiative includes the “Five Simple Steps to Get you Started” toolkit, Workshop, and interactive website. AARP Foundation is requesting applications from eligible organizations to partner with the Foundation to host the workshop component. Applications are due August 26, 2016 by 11:59 pm Eastern Time and must be completed online. AARP and AEO will host an informational webinar for participants on August 4, 2016 from 12:00-2:00pm PT,

AEO Feedback: AEO is facilitating stakeholder engagement related to the SMART (Straightforward Metrics Around Rate and Total Cost) Box. The engagement process includes a questionnaire intended to help solicit feedback from a broad range of stakeholders. Please submit your feedback by August 5, 2016. Background: In May of 2016, OnDeck, Kabbage, and CAN Capital announced an initiative to create and adopt a model disclosure for small business lending with support from AEO. The goal of the Smart Box is to make progress toward advancing transparency for the benefit of small business owners. These three lenders (and others) are committed to adopting a common set of metrics including total cost and APR.

Professional Development Opportunity: You’re invited to join the CFED Assets & Opportunity Network and Center for Financial Security for a new four-part virtual Listening & Learning Series on Financial Coaching & Counseling. They are on the following Wednesdays from 12:-1:30pm PDT: August 10, and September 14. The A&O Network has also released Financial Coaching Census.

Nonprofit Taxes Webinar: The California Board of Equalization is offering free nonprofit seminars and workshops discuss tax laws, exemptions, and reporting requirements as they apply to non-profit and exempt organizations during the month of August in Perris, Oakland, Apple Valley, Fullerton, and Chula Vista.

For Your Clients: Fund and Fuel Your Dreams is a 2-day event on September 8-9 where you will get hands-on, expert training on how to raise money for your business. You will leave with a step-by-step plan and resources to take the plan forward. It is also a place to connect with like-minded mission-driven, heart centered women entrepreneurs in a supportive fun environment!

Attention CDFIs: The Department of Treasury (Treasury) is seeking your comments on the CDFI Program’s forms and applications. Federal agencies are required to give stakeholders the opportunity to comment on the agency’s forms and information gathering processes. Treasury is soliciting feedback on the Financial Assistance Application and the Technical Assistance Application. Comments are due by September 12, 2016.

PayDay Lending Rules: The Consumer Financial Protection Bureau (CFPB) has proposed a rule aimed at reshaping the market for payday loans and other short-term credit. The proposal would require lenders to ensure that the consumer has the ability to repay the loan, provide notice that the lender is withdrawing funds from the consumer’s account and cease automatic withdraws if the consumer’s account is overdrawn. Comments on this proposal are due September 14, 2016.

New Report: Opportunity Fund released a very important research report, Unaffordable and Unsustainable: The New Business Lending on Main Street.” Until now, we have been relying on stories to explain what’s happening with online lending. Now we’ve got some data on the loans and cash advances being offered to small businesses by short-term, high-cost alternative lenders. Cliff notes on findings: 94% interest rates; average payment is 1.78x income -YIKES.

For Your Clients: The California Labor Enforcement Task Force (LETF) has designed new mobile versions of fact sheets to help employers understand and follow labor, licensing and payroll tax laws. The fact sheets have been designed for employers in specific industries including: Agriculture, Automotive, Construction, Garment, Landscaping and Restaurant.

Take Action: If there’s ever a time in politics that really needs a woman’s voice, that time is now. CAMEO has joined Women Impacting Public Policy (WIPP) for their campaign – WE Decide 2016 – to engage women in business in the 2016 election.